Information Technology Outsourcing Market
According to a new study by a global consulting company, software company owners in India are likely to see their wealth grow over 400 percent over the next decade, the fastest in the world. The reason is the explosion in high technology growth, especially in information technology where India currently controls about two third of the outsourcing market. As many countries are modernizing their businesses through automation, computer and software industry will grow much faster than any other sectors. Since most software companies are experiencing critical shortage of workers, they have to outsource and a majority of contracts would probably go to India. Among the top ten billionaires in India, four came from the information technology industry. Among the top ten millionaires in India, seven come from the Information technology.
Ten years ago, most studies believed that China would be the fastest growing economy due to its success in export of manufacturing products. In the past few years, as the world economy changed, both the U.S and Europe were experiencing difficulty, unemployment increased, money were scared, the amount of consumer products had declined significantly. When people stopped buying, companies stopped ordering, and exports in China came to a sudden stop. Many factories closed, many workers lost their jobs. As exports declined, many companies declared bankruptcy. Among the top ten billionaires in China, seven are owner of large factories. Among top ten millionaires, eight also are owners of factories. Many are seeing that their fortunes are slowly disappearing.
As the global economy is becoming more competitive, more global companies are focusing on reducing costs, many are automating their business for efficiency. As the economy shifts from products to services, Information technology outsourcing service industry is becoming the key driver for growth. According to the world wide salary 2011study, India's IT workers are among the lowest paid getting an average salary about a third of what IT workers are making in the U.S and Europe. The IT salaries are highest in Switzerland with an average of $180,000 per year. Scandinavian countries are second with an average of $148,000 per year. Germany, UK and the U.S are equal in the third rank with $132,000 per year. The study found India is ranked among the lowest pay with an average of $42,000 per year.
The study concluded that India will continue to be the leading destinations for most IT development but its current IT workers shortage could be a problem for India to maintain its position in the future. Some competitors are emerging with even lower wages than India such as Vietnam, Bulgaria, Poland, Philippines, Indonesia, Thailand and Malaysia, where the average annual salaries are between $24,000 to $35,000. The question remains whether these countries also has the skills to compete with India or not?
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
